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Immunomedics Inc (IMMU) Q4 2018 Earnings Conference Call Transcript

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Immunomedics Inc  (NASDAQ: IMMU)
Q4 2018 Earnings Conference Call
Feb. 26, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. As a reminder, this call is being recorded. Today is Monday, February 25, 2019.

At this time, I'd like to turn the conference over to Chau Cheng, Senior Director of Investor Relations at Immunomedics.

Chau Cheng -- Senior Director, Investor Relations

Thank you, Jimmy. On December 14, 2018, the Company's Board of Directors approved a change in the Company's fiscal year-end from June 30 to December 31, effective immediately. During this earnings call, the reporting period for the six months ended December 31, 2018 is referred to as the transition period.

Before we begin, I'd like to remind everyone that during this call, we will be making forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Such statements may involve significant risks and uncertainties and therefore actual results could differ materially from those expressed or implied on this call. For factors that could cause such differences, please refer to our regulatory filings with the Securities and Exchange Commission, most recently, our transition report on Form 10-K for the transition period ended December 31, 2018.

The earnings report is available on our website at immunomedics.com. With us on the call today with prepared remarks are Dr. Behzad Aghazadeh, Executive Chairman; Usama Malik, Chief Financial Officer; and Dr. Robert Iannone, Head of Research & Development and Chief Medical Officer. Also on the call for Q&A is Scott Canute, Executive Director. Following the prepared remarks we will open up the call for questions.

One housekeeping item before I turn the call over to Behzad. While clearly of high importance, we ask for your understanding that we are currently limited in our ability to provide substantial additional details on the CRL activity or speculate on timelines. And as such ask that you take this into account when posing your questions. Thank you. Behzad?

Behzad Aghazadeh -- Executive Chairman

Thank you, Chau. Good afternoon everyone and thank you for joining us. Along with our earnings release this afternoon, we made a number of organizational announcements that I will walk through in a moment. After that, I'll briefly touch on our progress with respect to the CRL response before turning it over to Usama for an overview of our financials, and Rob, for a brief update on our clinical development programs.

Today, we announced that Michael Pehl is leaving the organization and returning to Europe to spend more time with his family. Michael was instrumental in building the leadership team at Immunomedics and reshaping the culture of the organization. I would like to thank Michael for his service over the past 15 months and we wish him well in his future endeavors. The Board of Directors has appointed me Executive Chairman and I'll be working closely with the leadership team to drive our corporate objectives.

The Board has also appointed Scott Canute, current member of the Board to Executive Director. He will be leading our organizational response to their Complete Response Letter. As you know, Scott, is a leading expert in manufacturing and quality with more than 36 years of experience in the biopharmaceutical industry. He has an excellent track record of leading managing and turning around manufacturing organizations, first at Eli Lilly, where he last served as the President of Global Manufacturing Operations, and later at Genzyme, where he was the President of Manufacturing and Corporate Operations. We're fortunate to have Scott at the helm to lead this critical initiative.

Let me provide a short overview of our CRL initiative. Upon receipt of the CRL in mid-January, we assessed the content, and as previously communicated determined that they were solely focused on CMC related matters. We quickly assembled a CRL response team under Scott's leadership to develop our response strategy. And over the past five weeks, this team has systematically reviewed all concerns raised by the agency and is mapping out our response to each of the items.

The team is close to finalizing our response strategy in advance of the meeting request with the FDA. We have high confidence in our ability to respond to the issues and resubmit our BLA late in a timely fashion, and that confidence has only increased since the CRL team began their work. Nevertheless, we eagerly await the opportunity to discuss the plans with the FDA before we can firmly commit to specific resubmission timelines.

In the meantime, my appointment as well as Scott's gives this Company the ability to maintain focus on the key task at hand, while also providing us the flexibility and time to attract the highest caliber candidate to lead the Company as CEO.

Finally, I'm pleased to announce the addition of Dr. Charles Baum to our Board of Directors. Chuck has been President, CEO and Board member of Mirati Therapeutics since November 2012. Prior to joining Mirati, he was Senior Vice President for biotherapeutics clinical research at Pfizer and served as the Head of Oncology Development and as Chief Medical Officer for Pfizer's biotherapeutics and bio-innovation center.

Chuck's impressive drug development accomplishments include major breakthroughs in cancer treatment at Axitinib, Crizotiniba and Sunitinib to just name a few. Chuck brings a strong scientific drug development and executive management perspective that will be invaluable to the Company as we continue to execute and expand on our development priorities.

Before I turn over for an overview of our financials, it is also my pleasure to announce that Usama Malik has been appointed from Interim CFO role to CFO. Usama has been a critical member of the leadership team since our Board assumed control of the Company and most recently has been dedicating himself to prepare the organization for the next stage of growth from a finance and infrastructure perspective. We are pleased to have him in this role. Usama, over to you for the discussion of the financials.

Usama Malik -- Chief Financial Officer

Thank you, Behzad. We had no revenues in the transition period, due primarily to the discontinued sale of LeukoScan during the quarter ended March 31, 2018, in order for us to focus on our ADC business. Revenues in the comparable period ended December 31, 2017 were approximately $1.3 million. Total costs and expenses were $144.5 million for the transition period compared to $52.3 million for the comparable period ended December 31, 2017, due primarily to a $51.1 million increase in Research and Development expenses; $23.3 million increase in G&A expenses, and $18.4 million increase in sales and marketing expenses.

Most of these increases were attributable to activities related to preparations for the potential approval and commercial launch of sacituzumab govitecan for patients with at least two prior lines of treatment for metastatic triple-negative breast cancer in the United States, to expand clinical development of sacituzumab into other indications and to continue to evolve our global supply chain.

We recognized a $1.4 million non-cash income for the transition period compared to $59.6 million non-cash expense for the comparable period ended December 31, 2017 due to the net appreciation fair value of outstanding warrants and the exercise of warrants. There were no outstanding awards outstanding as of December 31, 2018. Interest expense was $20 million for the transition period compared to $2.9 million for the comparable period ended December 31, 2017. The increase was due primarily to increased debt balances as a result of the agreement with Royalty Pharma.

Net loss attributable to stockholders was $157.7 million or $0.84 per share for the transition period compared to $121.3 million or $0.88 per share for the comparable period ended December 31, 2017. As of December 31, 2018, we had approximately $500 million in cash, cash equivalents and marketable securities. The number of outstanding shares was $190 million and the fully diluted count was $204 million.

We believe our projected financial resources are adequate to support our clinical development plan for sacituzumab govetican further build our clinical and manufacturing infrastructure and fund operations through 2020. Rob is now going to highlight some of our clinical progress.

Robert Iannone -- Head of Research and Development and Chief Medical Officer

Thank you, Usama. Earlier this month, we reported updated results with sacituzumab govetican in triple-negative breast cancer and urothelial cancer. The TNBC update was published in the New England Journal of Medicine, which demonstrates in greater detail the favorable benefit risk profile, while including additional safety information on 420 patients with epithelial cancers, which showed a favorable safety profile, consistent with prior publications.

In urothelial cancer, an update on this cohort from Study 01 was recently provided by Dr. Scott Tagawa on an oral presentation at the 2019 Genital Urinary Cancer Symposium. Sacituzumab govetican produced an objective response rate of 31% in 45 heavily pre-treated patients, including encouraging activity in patients with hepatic metastases and those who had received prior immune checkpoint inhibitors. In a sub-group of patients with two or fewer prior lines of treatment, the ORR was 39%. For patients with liver mets, and patients with prior checkpoint inhibitors and platinum-based treatments, ORR was 33% and 27% respectively.

Notably, patients with prior checkpoint inhibitor treatment have been more heavily pre-treated with a median of three prior therapies. Importantly, responses were durable with a median duration of response of 12.9 months, median PFS and OS is 7.3 and 16.3 months respectively. At the time of data cut-off on September 1, 2018, five patients remained on treatment and nine patients had treatment duration of more than one year. Despite repeated dosing, sacituzumab govitecan was well tolerated with a manageable and predictable safety profile.

The most common treatment emergent adverse events were neutropenia, and gastrointestinal in nature, which were manageable with routine supportive care. Only five patients out of the 45 discontinued due to treatment-related adverse events. There were no treatment-related deaths. Given the favorable benefit risk profile of sacituzumab govitecan, we are committed to broaden the potential use of sacituzumab for the benefit of cancer patients by evaluating it in a number of refractory solid cancers beyond TNBC. This includes urothelial cancer, hormone receptor positive metastatic breast cancer, non-small cell lung cancer, and other hard to treat solid tumor indications either as monotherapy or in combination with immune checkpoint inhibitors or PARP inhibitors.

As previously communicated, we plan to initiate the Phase 3 pivotal study in HR positive HER 2 negative metastatic breast cancer in the second quarter and our basket study in non-small cell lung cancer and other TROP-2 high expressing tumors by the end -- sorry, by second half of 2019.

With that, I'll turn it back to Behzad.

Behzad Aghazadeh -- Executive Chairman

Thank you, Rob. So in summary, we have clear priorities, the right expertise to tackle these priorities and are well capitalized to execute on our business objectives. Thank you for your continued interest and support.

And with that, operator, please open up the call for questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Matthew Harrison with Morgan Stanley. Your line is now open.

Matthew Harrison -- Morgan Stanley -- Analyst

Good afternoon. Thanks for taking my questions. I guess two from me if I may. So, the first one is, it looks like on the FDA website, they have classified the AAR (ph) is a VAI. I am just wondering if you guys can comment on what your interpretation of that is or what our interpretation of that should be? And then I have a follow-up. Thanks.

Unidentified Speaker --

Okay, Scott Canute's on the call, so maybe you want to take that?

Scott Canute -- Executive Director

Yes, sure. In terms of the timeline, we are obviously not getting into specifics at this point, but voluntary action indicated it's self-explanatory, relates to voluntary action indicated, which means there is a time window -- the time window that the FDA can choose from. Our timeline basically is going to be around our reinspection timeline. The way we look at it right now -- and again, it's the ultimately FDA's decision. It's not ours.

But with the reinspection it's probably trending toward the type 2 type of submission which could give them up to six months upon resubmission. However, they don't have to take that full timeline clearly. In this case, we've got label. We've got significantly number of issues. We have -- the clinical data looks good. There are still safety issue, it's predominantly -- exclusively relates to CMC issues at this one site that we have here. And so they could choose to do that sooner rather than later on that one.

Matthew Harrison -- Morgan Stanley -- Analyst

Great, thank you. And then, the second question is just on Ascent. Any update you can give us on enrollment of that study and how that's progressing?

Usama Malik -- Chief Financial Officer

We haven't provided any pre-guidance. We've said we expect it to be completed by the first half of this year.

Matthew Harrison -- Morgan Stanley -- Analyst

Thank you.

Behzad Aghazadeh -- Executive Chairman

Thanks, Matt.

Operator

Thank you. And our next question comes from Michael Schmidt with Guggenheim Securities. Your line is now open.

Michael Schmidt -- Guggenheim Securities -- Analyst

Hey, good afternoon. Thanks for taking my questions. I had a couple as well. Maybe the first one regarding the commercial team, the commercial infrastructure, I recall prior to the PDUFA date, you already hired the full commercial team. And I was just wondering what your plans are for, I guess, maintaining that full sales force during the whole CRL and resubmission process?

And then I have a second question as well.

Behzad Aghazadeh -- Executive Chairman

Yes, sure, Michael. This is Behzad. So with respect to the commercial organization, obviously there is some internal resources and hiring that we made as you pointed out. But they are OpEx and op spend (ph) that was ongoing. So anything that was external, we immediately cut-off as soon as practical upon receiving the CRL. With respect to the internal organization, we have not made substantial changes as of yet, as we still are awaiting clarity around the resubmission timeline. As I am sure, you can appreciate there would be substantial cost if we can turn this in an expedited fashion.

We may choose to go down one path versus something that would be -- take a little longer. And so while we are waiting to gain that final clarity, we have not made any further changes.

Michael Schmidt -- Guggenheim Securities -- Analyst

Makes sense. Thanks. And then I understand, you don't want to talk about potential timelines for resubmission before meeting with the FDA. But could you maybe give us some sense of, at what -- in within what timeframe an actual FDA meeting might happen?

Behzad Aghazadeh -- Executive Chairman

Yes, that's to some extent, in our court, and to some extent, in their court. So as we sort of laid out in our opening remarks, we are in the sort of final throes of putting together our response strategy, and we want to go to them with a complete view of what we need to undertake based on understanding of what's in the CRL. At that point, and as we sort of get very close to that, we would request the meeting.

Now under FDA guidelines, they have a certain period to respond, to grant that meeting. But that response could also happen really at their discretion sooner given we have breakthrough designation. It might come earlier. And so as a result, it's really hard to exactly nail down when that meeting would take place.

Michael Schmidt -- Guggenheim Securities -- Analyst

Okay. Thank you. And maybe one more for Rob. I know in the past, you've talked about a potential interim analysis of the Phase II study in urothelial cancers so around mid-year. I was just wondering if that is still being planned. And if so what investor expectation should be in terms of patient numbers potentially at that update and maybe follow-up as well.

Robert Iannone -- Head of Research and Development and Chief Medical Officer

Yes. We haven't guided the exact timing actually. And what we have said is that, we've built in an interim analysis after a number of patients that would give us a good enough read and also give us enough patients to have a meaningful conversation with the FDA about the results and the potential for a breakthrough designation if they are promising.

Michael Schmidt -- Guggenheim Securities -- Analyst

Okay. And is that still a 2019 sort of event.

Robert Iannone -- Head of Research and Development and Chief Medical Officer

Yes, we expect it will.

Michael Schmidt -- Guggenheim Securities -- Analyst

Right, thank you.

Behzad Aghazadeh -- Executive Chairman

Thanks, Michael.

Operator

Thank you. And our next question comes from Paul Choi with Goldman Sachs. Your line is now open.

Paul Choi -- Goldman Sachs -- Analyst

Hi, thanks for taking our questions. Maybe just to help us sort of understand, maybe the spend level in 2019 and 2020, I appreciate that part of the ramp up in the tail end of last year was the addition of the sales force. But can you maybe directionally or in rough numbers give us a sense of how much of the recent uptick in spend is ongoing -- will be ongoing versus one-time? And is that the sort of the level of cash burn we should think about for 2019, because I think you indicated you have enough cash to go to 2020?

Usama Malik -- Chief Financial Officer

Yes, I think the three primary drivers for the bump up in the spend, one is commercial, as you pointed out, but there is also expanded in our clinical programs as well as manufacturing investments as we scale up. Some of that is ongoing. Obviously, I discussed some of the commercial -- I don't think we've broken down the line items, but as you pointed out, we've guided broadly to the cash runway. So, I think it's probably useful bumpers to be able to use to get a sense of what the burn might look like.

Paul Choi -- Goldman Sachs -- Analyst

Okay. Thanks for that. And then maybe one for Rob regarding the ASCO GU data, with the incremental patients that we did see uptick in PFS and OS, they trended up somewhat versus the last update you gave. I guess, in terms of the representativeness of this data as we think about a potential interim later this year or the final readouts for this, what is the-sort of, I guess, implications from these trends with regard to sort of the competitive landscape in this later line population in your opinion?

Robert Iannone -- Head of Research and Development and Chief Medical Officer

So, my opinion is, this was a heavily pre-treated patient population and a poor prognostic population when you look overall at the frequency of additional mets, especially hepatic mets. And I think it's encouraging that we had five patients at the data cut-off who were still receiving treatment and those patients and others who were still in response are really driving the extension of the PFS as you noted, overall duration of responses of 12.9 months. So it's a reasonably sized dataset and it continues to be very encouraging.

Obviously, we've designed TROPHY so that we have a cohort that is explicitly the highest unmet need having failed platinum and PD-1 inhibitor and it would therefore be a population that you could go to the FDA with a single arm data and so, we are eager to see those results.

Paul Choi -- Goldman Sachs -- Analyst

Okay. And last question is, you said, you are firm the start of the hormone-receptor positive breast cancer trial for the second half of this year, but how flexible is that timing on resource demands to address to the CRL?

Robert Iannone -- Head of Research and Development and Chief Medical Officer

What do -- could you mind clarifying what do you mean by how flexible is it?

Paul Choi -- Goldman Sachs -- Analyst

Is that -- I guess what I'm asking is, is there any chance that timing would be pushed off in order to focus resources on the CRL? Would this still be full steam ahead?

Behzad Aghazadeh -- Executive Chairman

Yes, maybe I could just answer. Just to clarify, I think their intent is to start that trial by the end of the second quarter or during the second quarter not second half. And that CRL response is pretty much independent of any clinical development priorities that we have and we believe we can accomplish both at the same time.

Robert Iannone -- Head of Research and Development and Chief Medical Officer

Yes, absolutely.

Paul Choi -- Goldman Sachs -- Analyst

Great, thank you.

Operator

Thank you. And our next question comes from Phil Nadeau with Cowen and Company. Your line is now open.

Philip Nadeau -- Cowen and Company -- Analyst

Good afternoon. Thanks for taking my questions and thanks for the update. First question on the FDA meeting on the Complete Response Letter. What's your disclosure strategy following that meeting. Will you disclose the results of the meeting immediately or will you wait for the FDA meeting minutes?

Behzad Aghazadeh -- Executive Chairman

I think, Phil, nice to speak to you, Behzad here. I think it's pretty reasonable to assume that once we have clarity, we'll convey the key sort of takeaways in particular. I think the most important aspect is, the timing of the resubmission. Whether that requires us to wait for the minutes or not, it's really probably a function of how clear that message is received from us by the FDA.

In the past, what I would also point out is that, perhaps given our breakthrough designation, these minutes tend to -- on occasion also come pretty quickly, on occasion, they take longer. So it's really hard to predict what we'll need to do. We'll just -- once we have clarity, we will provide that clarity I think is the key message here.

Philip Nadeau -- Cowen and Company -- Analyst

Got it. Fair enough. And then, second on the urothelial interim analysis, appreciating that the goal of the interim analysis is actually, maybe to have a discussion with the FDA what's the disclosure strategy around that interim? Is that something that you are going to let investors see or it will be presented at the medical meetings subsequently? Will we see that interim when it happens?

Robert Iannone -- Head of Research and Development and Chief Medical Officer

Yes. So the interim is formally built into the trial design. We've said that in the past and so that allows us to then publish the data at the appropriate time.

Philip Nadeau -- Cowen and Company -- Analyst

Okay. Got it. And then, last question on the confirmatory study in triple negative breast cancer. Appreciating that the trial is going to finish enrollment by the mid part of this year, when can we expect to see data from it? I guess, I am not looking for specific guidance, but how would we as investors think through when that data is likely. Do we simply add the expected PFS to the end of the enrollment and that's when the data comes out or is it a more complicated timeline than that?

Unidentified Speaker --

Yes, I would say it's a little more complicated. We haven't reguided yet, because it's still early in the course of that study in terms of the events that accumulate here. What we'll view is to look at the events of course in a blinded way and do projections, so that we time the analysis to match within the protocol.

I guess, the only thing I could say is that in the past, we have said that the PFS analysis will be accompanied by an interim OS analysis and you could imagine that the analysis plan takes that into account. So that the ultimate timelines will be driven by both of those endpoints.

Philip Nadeau -- Cowen and Company -- Analyst

Got it. Okay, and maybe a follow-up. The clinicaltrials.gov calls the primary completion of the trial mid-2020. Is that a reasonable expectation or a reasonable time for us to use today?

Robert Iannone -- Head of Research and Development and Chief Medical Officer

It's just that it's too soon to do any reguiding in terms of our modeling. And so once we are able to model something that's more precise, then we'll update ct.gov and we will communicate that externally as well. But we just haven't made any changes from the initial projections

Behzad Aghazadeh -- Executive Chairman

I think, Phil, what's probably, what's worth (ph) capturing is that, going back to the way you phrase your question which is sort of tack on some PFS to the end of the trial and as a readout. Again, I think it's important to factor in what Rob said about OS is also a consideration here as the authorities would presumably want to see something that has sort of value, if you will.

And so some level of maturity in that readout would be also helpful. And so that might also factor in rather than just tacking on the PFS the timeline for the OS events which are probably substantially earlier versus the progression event itself. That might also factor into how and when this trial reads out.

Philip Nadeau -- Cowen and Company -- Analyst

Actually if you -- is the OS analysis -- is the number of events required for that? Is that in this physical analysis plan or is that something that management has the discretion as to when to trigger it?

Robert Iannone -- Head of Research and Development and Chief Medical Officer

What I would say is that, the analysis plan will drive the triggering in this. But we stopped short of sharing those kinds of detailed analysis plan which would be pretty uncommon to do so. I don't think I have anything to add to what we've already said.

Philip Nadeau -- Cowen and Company -- Analyst

Got it, thanks for taking my questions.

Behzad Aghazadeh -- Executive Chairman

Thanks, Phil.

Operator

Thank you. And our next question comes from Chris Howerton with Jefferies. Your line is now open.

Chris Howerton -- Jefferies -- Analyst

Hey, there. Thanks for taking the questions. I don't think there's too much more to ask at this point, but I guess one thing that we observed was that there was several positions opened up in the quality group, and I'm just curious what the personnel statuses of your quality grew and how specifically that relates to the CRL subgroup that you described at the beginning of the call? Are there additional personnel that are required to address these issues or how should we be thinking about the internal quality group and with respect to resolution of the CRL?

Unidentified Speaker --

Let me start that off and then I'll hand it to Scott, maybe. But just to be clear, the CRL team is more just organizationally how we -- if you will, organize ourselves around how we are going to go out responding. That group is being led by Scott Canute and into that group, we will -- the regulatory team reports into that group, the quality, the manufacturing. Just to be very coordinated across functions. It has really nothing to do with additional resources.

Now with respect to your question of job openings, I presume it's referring to maybe our website, that I'll ask Scott to comment on where the Company is with respect to building up the organization.

Scott Canute -- Executive Director

Yes, I mean, there is some key positions we are obviously looking for, but you would, in any situation, similar to this as well. To be quite honest, relative to everything I have seen in the past, I've been involved in before, we are actually set pretty well at this point, actually surprisingly well and we've got people that are firmly committed to the mission. Everyone is passionate about getting this done and making us sustainable and stronger quality manufacturing organization.

We will get the CRL taken care of in the appropriate time here, ultimately, the FDA is the arbitrator here clearly, but, we are also going to have a stronger organization as a part. And people are having fun.

Chris Howerton -- Jefferies -- Analyst

Good. Okay, and so, I guess, it sounds like you have the human resources to address the problems. I guess, the obvious question in my mind in response to that is that, if you have the right personnel and the right resources to do this, why was there a CRL there in the first place? And how will whatever activities you are doing with the same people be able to address something that will get it to a commercial stage?

Behzad Aghazadeh -- Executive Chairman

Yeah, no, it's fair. It's a fair question. It's a good question as well. But we -- I don't want to imply that we haven't made changes. We certainly have made some changes. There is people that are not up to -- not if you will, in a situation like this, but most of the people are pretty solid and we can work with them and use them. We've made some changes in our leadership position and we brought in some of the best consultants that we know, that I know, that I've used in previous assignments as well.

There is a standard way of approaching these types of situations. It's not particularly exotic. I've been here five weeks now or so looking at a lot of detail at all levels of the organization. And I am not seeing anything that I have not seen before, not seeing anything that isn't inherently fixable at all and our plan will be in place and we will get the job done.

Chris Howerton -- Jefferies -- Analyst

Okay, that's totally fair. And then, the last thing in terms of additional manufacturing capacity you have talked about that Samsung Biologics will also be able to produce its antibody and the tech transfer has been complete and that they was working on engineering runs. So is there any incremental updates in terms of their status and timelines for them to be able to produce antibody for a commercial product?

Scott Canute -- Executive Director

I mean, we prefer not go into too many specifics around that. Samsung is a quality partner. It's a valued partner. We are very pleased with the progress that we are seeing there and we will continue to work closely with them to integrate their supply capability with the capability of this site as well here.

Chris Howerton -- Jefferies -- Analyst

Okay.

Behzad Aghazadeh -- Executive Chairman

I think I would, add, perhaps, it's still our intention, as it has been all along that this will be the primary source of commercial material until we've made that switchover, that switch is on its own timelines and it's progressing as Scott just said quite well. But it's really not strategy to have them step in here.

Chris Howerton -- Jefferies -- Analyst

Yeah. Now I totally understand. Well, OK, well thank you so much for taking the questions. Thanks for the time.

Behzad Aghazadeh -- Executive Chairman

Thank you.

Operator

Thank you. And our next question comes from Jim Birchenough with Wells Fargo. Your line is now open.

Nick Abbott -- Wells Fargo -- Analyst

Sir, good afternoon, it's Nick in for Jim this afternoon. First question and that relates to the Complete Response Letter rule where it says, when possible FDA -- it doesn't say, FDA recommends actions the applicant might take to place application in condition for approval. I know it doesn't read particularly well, but I think it's fairly clear that if FDA identifies an issue then, where possible they try and state what the remedy is.

Can you comment on how many of the issues they raised, that FDA has provided you with guidance as to what they want?

Behzad Aghazadeh -- Executive Chairman

I'll turn it to Scott. I think, just from a high level, and based on our assessment of the CRL and the team that's been on the ground, I think we have pretty good understanding on what they are asking for and are just putting together, as I said, the strategy to go back to them with our sort of overview and the responses. But Scott, is there details that they have provided?

Scott Canute -- Executive Director

No, there is nothing certainly that we want to go on to any kind of detail here. I mean, it's a long time and getting into specific details is just a no-win situation. It's hard to take things out of context. But we understand what they said very clearly. We've incorporated those into our plans comprehensively. As Behzad says, we're just finalizing our strategy in order to approach the meeting with the FDA.

Nick Abbott -- Wells Fargo -- Analyst

Yeah. And so the meeting with the FDA, then just to make sure you're on the same page, here are the issues, here's we plan to address them. Is that it?

Unidentified Speaker --

Yeah, -- that's essentially, I mean, we are not expecting any big or shattering insights during the meeting.

Nick Abbott -- Wells Fargo -- Analyst

And maybe this sequence, and maybe the sequence of how, when, everything is completed.

Scott Canute -- Executive Director

Yeah, exactly.

Nick Abbott -- Wells Fargo -- Analyst

Okay.

Unidentified Speaker --

The thing I want to emphasize here that, what we are striving toward, and we are assuming that reinspection is most likely the critical path item here. It's not to get the reinspection done quickly, it's to get it done well for the review process is very -- makes it very easy for the FDA to review, review it well and make their ultimate decision on the product. So that's what we are really focused on here.

So we are not overly focused on any particular meeting, up to that point, we want to proceed with good haste, but we want to do it well and do it right.

Nick Abbott -- Wells Fargo -- Analyst

Okay. And then just a final one for me. You have this commercial team, group of sales reps, is there any thought that if the timeline for this extent that you might be looking to in-license a product or offer your sales force to another company to help co-detail a product?

Nick, those I think are all good ideas and I think what I would say is we are not leading any idea sort of untouched, but at the same time we are also very focused on getting to the clarity that we need, because that might resolve all a lot of questions. So those are good ideas.

Okay, well. Thank you, and look forward to further update.

Behzad Aghazadeh -- Executive Chairman

Thanks very much, Nick.

Operator

Thank you. At this time, I'd like to hand the conference back over to Chau Cheng for any closing remarks.

Chau Cheng -- Senior Director, Investor Relations

On behalf of the entire leadership team, I'd like to thank you very much for joining us this afternoon. We look forward to updating you in the future on our ongoing progress.

Operator

That does conclude today's conference call. You may now disconnect. Thank you, and have a great day.

Duration: 36 minutes

Call participants:

Chau Cheng -- Senior Director, Investor Relations

Behzad Aghazadeh -- Executive Chairman

Usama Malik -- Chief Financial Officer

Robert Iannone -- Head of Research and Development and Chief Medical Officer

Matthew Harrison -- Morgan Stanley -- Analyst

Unidentified Speaker --

Scott Canute -- Executive Director

Michael Schmidt -- Guggenheim Securities -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Philip Nadeau -- Cowen and Company -- Analyst

Chris Howerton -- Jefferies -- Analyst

Nick Abbott -- Wells Fargo -- Analyst

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